Council members don’t believe in Embassy theater


City Council members expressed doubts Tuesday about the Embassy Square Foundation’s ability to raise the money for its planned theater and about the city’s ability to support the project now or in the future.

During a Finance and Intergovernmental Relations Committee meeting on the budget, talk turned to the cost of operating the new H. Leslie Perry Memorial Library at Embassy Square, and the conversation flowed into the next phase of the cultural center, the 1,000-seat theater at the intersection of Wyche and Breckenridge streets.

City Manager Eric Williams said he has heard a legitimate questions from people: “How in the world could you go about building this brand-new library, and you’re telling me you don’t have the money to operate it?”

Council member Elissa Yount said that in light of the financial questions in the construction of the $9 million first phase — the library and the McGregor Hall gallery — and the doubts about the city and county being able to pay $1 million or so a year to run the library, “I cannot lend any support to building that auditorium until our fund balance is at 35 percent and our finances are where they need to be.”

The city’s general fund balance fell below 3.5 percent at the end of fiscal 2004 and is perhaps $4 million short of the 35 percent level. Meanwhile, the Embassy foundation officially kicked off the fundraising for Phase 2 at the construction celebration for Phase 1 on April 1. The theater’s cost is estimated at $6 million, but construction expenses continue to soar.

“We need to say what we should have said five years ago,” Yount said. “We can’t afford to operate this now.”

FAIR Chairman Bernard Alston said the theater won’t be an issue for at least five years, by which time he expects the city to be on a more secure financial footing. He said the financing of the library, including a mortgage on the site that the city gave to the foundation, will keep the Embassy organizers busy.

The funding for the theater will remain beyond the foundation’s reach for years, Alston said.

Yount, however, was looking beyond the construction. She said she doesn’t want the city to be handed a new building and a huge annual bill to run it, as is happening with the library.

The Embassy foundation’s executive director, Kathy Powell, said in recent months that the foundation has developed a business plan for the performing arts center, but she declined to make that plan public because it is continually being updated and revised.

“If the foundation wants to raise the money and build it and operate it, then go for it,” Yount said of the theater.

“I agree with you, but I don’t want to hurt their fundraising,” Williams said.

Council member Mary Emma Evans also worried about sending the wrong message: “It seems to me right now that the Embassy project is the only thing in the city that’s moving. … I don’t want people to think the City Council is against the vision that the Embassy foundation folks have.”

Williams plans to arrange a face-to-face meeting between Embassy officials and city leaders to make sure everyone understands the finances of both phases and the operational costs the city will assume with the buildings.

Yount said she wants, at the very least, for the foundation to develop a plan to repay the roughly $400,000 it originally agreed to raise to help Henderson acquire and engineer the south side of Embassy Square.

Under the capital budget for the project, Henderson planned to spend $400,000 in fundraising proceeds and $900,000 from a loan to put together the Embassy site and pay for architectural and engineering services.

In the end, the city spent $1.8 million, and all of it came from cash. The foundation did not give the city any of the money raised for the project, and Henderson couldn’t borrow against the land because the city gave the property to the foundation.